Hanoi (VNA)🐼 – The gross domestic product (GDP) increased 3.32% in the first quarter compared to the same period last year, lower than the Q1 target of 5.6% set in the Government’s Resolution 01/NQ-CP, according to the General Statistics Office (GSO).

Experts perceived that in the current world economic situation, the Q2 economy of Vietnam will continue facing an array of headwinds and is unlikely to make a growth breakthrough, but it is expected to improve from Q1.

Agricultural, service sectors – bright spots of economy

GSO General Director Nguyen Thi Huong said that the Q1 economic expansion was not high but still a positive result compared to the slow growing or even contracting economies of many other countries in the region and the world, which means the Government’s management and governance policies are gradually proving effective. Notably, though the industry and construction sector fell 0.4%, causing a 4.76% decrease in the overall growth, the agro-forestry-fishery sector rose 2.52% and contributed 8.85% to the economic expansion. The service sector expanded 6.79% and contributed 95.91% to the overall growth. Huong attributed this result to the consumption stimulation policy and tourism promotion programmes abroad since the COVID-19 pandemic was brought under control. Total retail sales of goods and consumer service revenue went up 13.9%, with earnings from tourism surging almost 120%, and accommodation and eating services 28%. In particular, the number of international arrivals in Vietnam shot up 29.7-fold year on year. Vietnam still posted a trade surplus of 4.07 billion USD in Q1. Meanwhile, inflation was kept under control at an appropriate level, with the first three months’ consumer price index (CPI) up 4.18% from a year earlier. The GSO official also stressed that the Vietnamese economy often posts slow growth in Q1, gradually accelerates in Q2, and rises strongly in the second half of a year. It may still follow this trend this year. Despite numerous difficulties it may encounter in Q2, the economy is still likely to improve from Q1. It is expected to enjoy a growth breakthrough in the last six months, she noted.

High hopes pinned on two “support pillars”

To achieve this year’s growth target of 6.5% as set in the Government’s Resolution 01/NQ-CP, the growth rate must reach 5.6% and 6.7% in Q1 and Q2, respectively. As the Q1 actual expansion was 3.32%, growth for the remaining months of the year must stand at about 7.5%, which is considered high as challenges to the economy remain and global economic uncertainties will continue affecting Vietnam. Deputy Minister of Planning and Investment Tran Quoc Phuong said that as the processing and manufacturing industry has been facing numerous difficulties and shrunken, more attention should be paid to other growth drivers, among which the agricultural and service sectors should be turned into support pillars for others. Meanwhile, among the three growth impetuses of consumption, export and investment, exports have decreased but Vietnam has still managed to maintain a trade surplus, at 4 billion USD. Foreign and private investment has been affected but still increased. Besides, because public investment plays a critical role, the Prime Minister has continued to order ministries, sectors, and localities to step up its disbursement. Governance policies at present should focus on developing the domestic market, which has a critical role to play when exports have to struggle with difficulties. Given this, more measures need to be devised to facilitate the domestic market, according to Phuong./.